The global agricultural machinery market is projected to witness significant growth from 2016 to 2022 and is expected to be valued over USD 200 billion by 2024 on account of upcoming technologies in the industry coupled with improved economic conditions and rising farm income. These factors are expected to boost industry growth over the next seven years.

Applications that make use of agricultural machinery include soil cultivation, loading, irrigation, traction and power, planting, milking, hay making, fertilizing, harvesting and pest control among others. Agricultural machinery includes seeding and harvesting machinery, tractors and other hardware equipment such as mixers, windmills, wool presses and grinders among others. Farm tractors are expected to lead the product segment in this market over the next few years.

The rising demand of this market is propelled by increased investment in new agricultural machinery due to the low-interest-rate as well as a rise in research and development expenditure and economies of scale. Additionally, another major factor that is expected to fuel market growth in the rapidly increasing global population which has led to an increase in the demand for food and other similar products. Governments are also providing subsidies to farmers for investing in better equipment to efficiently meet the needs for higher productivity. Rising food demand globally is expected to have a positive impact on the market over the next seven years.

As mentioned above, new technology is also supposed to propel the market during the forecast period. The objective of farmers the world over is to increase agricultural output by planting more crops. Manual seeding has certain disadvantages such as lack of uniformity and producer fatigue among others. These negative factors can be overcome by the mechanization of the seeding process which helps in providing consistency while performing various agricultural tasks. Additionally, automation also helps in applying the proper amounts of fertilizer to ensure that seeds germinate properly.

The costs of raw materials used in the manufacturing of agricultural machinery including rubber, iron and steel have also increased drastically over the past few years. Manufacturers and vendors have serious concerns over the fluctuating prices of raw materials and are hence under pressure from the numerous competitors in the market to provide products that are not only efficient but also affordable.

This market incorporates innovation opportunities for manufacturers in the field of research and development for new agricultural techniques such as precision farming, to aid in overcoming rapid urbanization and reduction in farmland areas and hence boosts the demand for advanced farming equipment, thereby fuelling growth in the global agricultural machinery market during the forecast period.

Platform designs allowing sharing of merchandise architectures and know-hows across multiple sectors offer substantial benefits for farm machinery OEMs. Several benefits presented by these models such as simplification of the component, faster time to market and supplier management are also projected to propel market growth over the next eight years.

The agricultural machinery market is segmented based on product type into haying, harvesting fertilizing and planting, farm tractors, plowing and cultivation, other types of agricultural machinery and parts and attachments. Of these, high demand from the agricultural tractor segment as well as from the harvesting machinery sector is expected to boost growth in this market over the forecast period.

North America is expected to account for a significant market share, closely followed by Europe in the global agricultural machinery market, owing to the already existing extensively implemented mechanization systems in the region. Market segments of planting & fertilizing machinery and plowing & cultivation machinery are also expected to expand at a moderate pace.

Asia Pacific is expected to grow rapidly over the next eight years owing to the increase in population in countries such as India and China among others whose primary population depend on farming to earn their livelihood. Governments of these and other similar countries are focussing on various methods to increase food productivity to meet the needs of the growing population. In this region, the demand for harvesting machinery is most prominent.

Manufacturers emphasize on mergers and acquisitions and extensive dealer networks to compete in the market. For instance, within the past five years, CNH Industries underwent two significant additions, the first was in 2010 with Kamaz, which is a Russian manufacturer and the second in 2013 with Fiat Industries. These factors are expected to have a positive impact on the industry over the forecast period.